Wall Street stocks advanced on Wednesday despite below-expectation economic data. The dollar dropped on release of data showing the economy shrank more than previously thought in the first three months and orders for durable goods contracted unexpectedly in May, which conflicted with Tuesday’s data showing a stronger-than-anticipated measure of consumer confidence and sales of new homes.
US shares fell earlier in trading but soared as trading proceeded, with the S&P 500 and Dow touching near record highs.
“As long as investors believe the economy will keep growing, and everyone expects growth in the second quarter, the lesser evil will be to buy equities at a modestly higher valuation, since bond and cash don’t represent better values,” strategist Bruce McCain of Key Private Bank in Cleveland told Reuters.
The Dow Jones Industrial Average added 27.67 points or 0.16% to 16,845.8. The Standard and Poor’s 500 soared 4.98 points or 0.26% to 1,954.96 while the Nasdaq Composite gained 14.46 points or 0.33% to 4,364.82.
The S&P 500 touched a record intraday level yesterday before stocks dropped sharply in the afternoon on concerns over events in Iraq. On Wednesday, insurgents attacked one of the largest airbases in Iraq as the first team of military advisers from the US arrived to help stem the violence.
According to Bloomberg, Monsanto Co added 5.1% after the largest seed firm announced plans to buy back stock worth $10 billion. AbbVie Inc added 2.3% after declaring its $46.5 billion overture for Shire Plc gives Shire owners compelling value and that it wouldn’t hesitate to go aggressive in its push to take over the pharmaceutical.
CBS Corp. soared 4.8% after the US Supreme Court determined that Aereo Inc broke broadcaster rights.
The US dollar declined to a one-month low against several major currencies after weak data on US gross domestic product and orders for durable products indicated the Federal Reserve may maintain its dovish attitude.
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